CUSO-News---Payments-Report

close

Categories

More Tags

Subscribe to Email Updates

Popular Stories

MAP Wins 2019 CUSO of the Year Award
Frictionless Payments
The Quick On Visa’s 8-Digit Bin Migration
How Are Person-to-Person Payments Being Used?
The Most Important Components Of A Credit Score
Written by Cyndie Martini
on May 10, 2016

Improvements and innovations in mobile payment platforms have gotten a lot of attention lately, and adoption rates are steadily increasing.

According to eMarketer, around 17.5 percent of 25- to 34-year-olds used mobile pay in 2015, but that number is expected to grow to 37 percent by 2017. Furthermore, approximately $8.71 billion worth of payments were made via mobile last year, though the digital business information source estimates that this year, that amount will rise to more than $27 billion.

The coming months will likely be a turning point for mobile pay, eMarketer explained, stating that mobile pay will grow 210 percent before the end of 2016. Additionally, the number of people who use mobile pay will jump close to 62 percent, resulting in 37.5 million users in the U.S.

Security reassurance
However, before the significant shift predicted for 2016, some concerns need to be addressed. A major reason adoption has been slower than expected is many consumers worries about how secure the new technology is.

In fact, in some ways, mobile payment platforms is more secure than using a debit or credit card. For example, MacRumors explained that in the case of Apple Pay, cashiers never see the cardholder's name, address, credit card number or any other identifying pieces of information. The card number is not stored anywhere on the retailer's database, so data breaches of the retailer don't affect Apple Pay users.

Finally, the user's fingerprint is required to validate the purchase. Without this biometric confirmation, the payment cannot be authorized, rendering a stolen iPhone useless for a thief.

Despite the fact that mobile payments are safe, users are still hesitant to adopt them, stating that security is their main concern, TechCrunch explained. In fact, eMarketer analyst Brian Yeager explained that around 62 percent of smartphone users say their worries about security are the reason they don't use mobile payment platforms.

This means it's not so much that security needs to improve, but those businesses, credit unions and banks that offer mobile payment platforms need to focus on educating its audience about how the payment method will keep their personal and financial information protected.

Habits to break
Another issue holding back mobile payment is the fact that consumers are often driven by habit. Whether someone frequently uses a bank or credit union's website or go to their nearest branch in person, the fact is that many people have already developed certain methods to manage their money that they're unlikely to stray from anytime soon. However, a study from The Pew Charitable Trusts found that offering some incentives might convince users to sway their habit.

One successful example on the market today is Starbucks's app. Users can earn free drinks and sandwiches by using the app. Outside of the retail sector, other incentives could drive greater acceptance of a mobile payment platform. For instance, a credit union can offer a rewards program through which users can earn gift cards, merchandise or travel points. Programs such as Member Access Pacific's Dream Points Loyalty Rewards Program can help credit unions implement these habit-changing incentives.

According to Mobile Commerce Daily, 2015 was a ground-breaking year for mobile payment platforms and 2016 will likely be a year of growth. Those who have made mobile wallet options available to their users will now work toward bringing more adoption rates and bringing current users back to their mobile wallet more frequently. One primary method of doing this will be to offer in-wallet incentives, like discounts and coupons, as well as rewards.

For credit unions offering a mobile wallet to its members, it is crucial to stay ahead of the game. The time to change members' payment habits to include your credit union's app first is now, and consumers have already made it clear what it will take to sway their payment habits: security and incentives. Provide reassurance of both of these, and your members will be more inclined to open your app next time they find themselves at the register.

 

Let Us Know What You Thought about this Post.

Put your Comment Below.

You may also like:

Apple Pay Mobile Pay apps Cash Samsung Pay Visa Debit

Mobile pay predicted to overtake cash by 2030

For many years, consumers have had three main options to choose from when they needed to make a purchase or payment: cas...

Apple Pay Mobile Pay Mobile Wallet apps Mobile Payments

What makes a good credit union mobile banking app

In today's world, consumers expect to be able to answer any question at the tap of their smartphone. Consumers want read...

Apple Pay Credit Cards Credit Unions Mobile Pay Mobile Wallet Debit

Moble checkout conversion falls 3.1%

Many businesses have historically struggled with online and mobile payments. The difficulty with onboarding new payments...